Looking at your code, I get the impression you're trying to use CRAM-MD5 authentication. From the output you pasted, it would seem that your SMTP server only supports the PLAIN and LOGIN methods, though. That may be worth a look.
That said, when I look at the Net::SMTP documentation, I only see two parameters for the auth() method: username and password. I suspect that's where your problem lies (apart from the earlier suggestion on interpolation).
Lastly, you may want to use TLS when sending credentials, unless you have reason to trust the network(s) the packets travel over. I suppose that is of less immediate concern. For that, you could try e.g. Net::SMTP::SSL. That does SSL (typically port 465). I don't have a STARTTLS suggestion handy (which your mail server also appears to support).